D-Link 2014 Annual Report Download - page 30

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7
D-LINK CORPORATION AND SUBSIDIARIES
Notes to the consolidated financial statements
(Continued)
(d) Business combination
The consolidated company measures the goodwill by evaluating the fair value of the consideration at
the acquisition date by deducting the assumed identifiable assets and liabilities. Acquisition-related
costs should be recognized as expenses in the periods in which the costs are incurred except those costs
that issue debt or equity securities.
(e) Foreign currency
(1) Foreign currency transaction
Transactions in foreign currencies are translated to the respective functional currencies of the
Consolidated Company entities at exchange rates at the dates of the transactions. Monetary items
denominated in foreign currencies at the reporting date are retranslated to the functional currency
at the exchange rate at that date. The foreign currency gain or loss on monetary items is the
difference between amortized cost in the functional currency at the beginning of the year adjusted
for the effective interest and payments during the year, and the amortized cost in foreign currency
translated at the exchange rate at the end of the year.
Non-monetary items denominated in foreign currencies that are measured at fair value are
retranslated to the functional currency at the exchange rate at the date that the fair value was
determined. Non-monetary items in a foreign currency that are measured based on historical cost
are translated using the exchange rate at the date of transaction. Foreign currency differences
are recognized in profit or loss, except for available-for-sale financial asset which are recognized
in other comprehensive income.
(2) Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments
arising on acquisition, are translated to the Consolidated Company’s functional currency at
exchange rates at the reporting date. Income and expenses of foreign operations are translated to
the Consolidated Company’s functional currency at average exchange rate for the period. Foreign
currency differences are recognized in other comprehensive income.
(f) Classification of current and non-current assets and liabilities
An entity shall classify an asset as current when:
(1) It is expected to be realized or intends to sell or consume it in its normal operating cycle;
(2) It holds the asset primarily for the purpose of trading;
(3) It is expected to be realized within twelve months after the reporting period; or
(4) The asset is cash and cash equivalent (as defined in IAS 7) unless the asset is restricted from
being exchanged or used to settle a liability for at least twelve months after the reporting period.
An entity shall classify all other assets as non-current.